The Cost of Augmented Reality: Worth the Investment?

Our recent Pokémon Go article explored the possible business benefits of utilising the game’s location features – we mentioned augmented reality then but now let’s have a look at it in greater detail.

Pokémon Go is currently predicted to be making $1.6 million per day just on iOS, despite being free to download. Creators Niantic raised $20 million as a start-up from Google Alphabet, Nintendo, and Pokémon Co. Compare this with the Oculus Rift which was first funded via a kick-starter of $2.5 million, then sold to Facebook in 2014 for $2 billion allowing access to almost unlimited funding. The success of Pokemon Go has partially been due to its accessibility to access augmented reality – all you need is a smartphone. The Oculus Rift headset will set you back a cool $899 and whilst it does create a brilliant virtual experience, it will cost you your arm and your leg.

After Google recently abandoned plans to create an Oculus Rift-style Virtual Reality headset, attention turned towards the capabilities of augmented and ‘mixed’ reality platforms. In a low-key affair back in 2014, Google purchased Magic Leap for $542 million, a start-up which specialises in superimposing 3D computer-generated imagery over real world objects. Magic Leap is currently believed to be valued at around $4.5 billion and claims via its website that it has ‘decided to take a different path and rethink the relationship technology has with people.’ Understanding the relationship between people and technology leads us to explore how technology can improve our sensory experience.

The idea of improving real-time sensory experience is very different to the ideas behind Virtual Reality (VR). VR completely removes the participant from their surroundings – ideal for gamers and those in a controlled setting but not ideal for those on the move (or wanting to see where they are going). Magic Leap have adopted the position that technology can be used for more than just creating new things, it can be used to enhance what we already have. Pocket Universe is an app which uses augmented reality to give users an in-depth, astrological look at the night sky using their location settings. The use of AR as an educational tool boosts engagement between students and the world around them, opening up possibilities for further marketing as an education aide.

Naturally, this sort of cutting-edge technology is by no means cheap. However, when we look at cost in terms of how these products engage with their audience (or consumer) versus the price of producing them the benefit of investment becomes much clearer. Several AR companies are now aimed at offering luxury retail solutions – Blippar offers tailor made augmented reality experiences for retailers to use to interact with their consumers. The use of AR to drive consumers towards businesses has the potential to create huge amounts of revenue and marketing capability.

In terms of utilising AR for gaming, the picture is less clear. The Guardian interviewed game designers and developers at Develop, a big-name developer conference in Brighton. Rami Ismail, owner of independent game studio Vlambeer, argued that ‘AR has never proven to be popular, and I don’t think it has just now. I think Pokémon proved to be popular and this AR just happens to be exactly the right metaphor for Pokémon, right?’ Other developers did not share the same sentiment, weighing in what they would do if they owned the game and going down the route of introducing a currently anticipated battle mode. The future of AR remains murky, however, if VR continues to grow in popularity and eventually dominate the gaming market – AR may relocate towards the professional solution market.

Like what you're reading, then subscribe to our newsletter

Join our mailing list to receive our insights, blog posts and be the first to see what we are working on.

Life is all about choices and you just made the right one. Well done you beautiful human, well done!